Argos consolidated revenues increased 14% in the first quarter of 2019
Published by David Bizley,
- The company reached US$99.39 million in operating Ebitda, with a growth of 3.7%.
- Revenues amounted to US$693.8 million, an increase of 14% compared to the same period of 2018.
- The total volume of cement delivered reached 3.8 million t, 4.7% higher, and the volume of concrete was 2.4 million m3, growing 2.3% over the first quarter of the previous year.
- In the United States savings of US$5 million were achieved thanks to the start of the implementation of the BEST 2.0 programme.
In the first three months of 2019, Argos, a cement company of Grupo Argos, reported a balance sheet with significant improvements in its figures and key indicators. The positive results of the start of the execution of the efficiency program BEST 2.0 are highlighted, which achieved the capture of the first 5 million dollars in efficiencies in the United States in the period, within the goal of about 70 million dollars identified by capture in the next 18 months.
The announcement of the completion of the construction of the Calcinadas Clays project at the Rioclaro plant, Colombia, which will represent, from the second semester of 2019, a partial replacement of the required clinker in cement grinding, at a higher cost, is also positive, with an efficient and reduced environmental impact due to the lower generation of CO2.
At the end of the period, revenues were 693.8 million dollars, with an increase of 14%. Operating Ebitda* reached US$99.39 million, 3.7% higher, with an Ebitda margin of 14.3%. On the other hand, the net profit was US$4.9 million, a figure not comparable with the net results obtained by the company in the first quarter of 2018, a period positively impacted by the non-recurring income from divestments.
The total volume of cement dispatched by Argos reached 3.8 million t, 4.7% more than in the same period of 2018, and the volume of concrete increased 2.3% reaching 2.4 million m3. This, leveraged in the recovery of the market in Colombia with the 4G projects and civil works dispatches, in addition to the significant improvements in the non-residential segment of the United States and the good infrastructure dynamics in that country.
These results are the reflection of a great teamwork that results in the growth of our revenues and volumes, the increase of our financial flexibility, the extraordinary results of our BEST program and the reduction of indebtedness." Thus, we reaffirm our commitment to serve every day better to our customers and continue accompanying the construction of dreams in all the territories where we have presence, "said Juan Esteban Calle, president of Argos.
Performance of business by regions:
In the United States Regional, Argos obtained revenues of 373 million dollars, 10.6% more than in 2018, and an Ebitda* of US$37 million, 12.6% higher. Cement volumes reached 1.4 million t with an increase of 13%, and 1.7 million m3 of concrete, with an increase of 3.1%, driven by the increase in shipments in areas such as Deep South, Florida, Arkansas and the Carolinas.
It stands out in the United States that through the BEST 2.0 program savings of US$5 million were achieved in the period.
In the Colombia Regional, revenues were recorded for US$177.7 million, 7.2% more than in 2018, and an operative Ebitda* of US$29 million, with variation of -10.7%. Cement shipments stood at 1.2 million t, with an increase of 3.9%; those of concrete totalled 688 000 m3, 4.2% higher; and those of aggregates reached 1.6 million t with growth of 24.3%.
The recovery of the indicators is due to the positive performance of the housing market, the increase in dispatches of concrete to civil works and to 4G projects, in which Argos is a supplier for 70% of the functional units. It highlights the contracts for the supply of cement and concrete for the Bucaramanga-Barrancabermeja-Yondó highway and the reconstruction of the Chirajara bridge.
In the Caribbean and Central America Regional, shipments reached 1.2 million tons of cement, with a decrease of -2.7%. The revenues were US$143 million, with a variation of -3.3%, and the ebitda* was located at US$43 million, with a variation of -14%.
The markets with the best performance in cement dispatches in the period were the Dominican Republic, Puerto Rico and the Caribbean islands, with increases of 22%, 12% and 10% respectively, which offset the slowdown in demand that has been occurring in Panamá since last year due to delays in the execution of infrastructure projects; sector that will be revitalised with the start of the new government and its impulse to works such as the third metro line, the fourth bridge over the canal, the expansion of the Arraiján highway and the beach corridor, works that will represent an investment close to the US$5.5 billion. In Panama, the expansion of Terminal 2 of the Tocumen International Airport stood out during the quarter, for which Argos dispatched close to 126 000 m3 of concrete.
The optimistic outlook in the three regions and the good results of this first quarter, added to the launch of innovative products, the execution of optimisation programmes and operational efficiency, the focus on the client, the positive outlook in the residential and non-residential segment and the increase in dispatches for infrastructure works in the three regionals augur a good rest of the year for the company.
*Operative Ebitda: Excludes non-recurring income related with power plants sale in Colombia en 2018, valuation of investment properties and effect IFRS16 of leases in 2019.
Read the article online at: https://www.worldcement.com/special-reports/14052019/argos-consolidated-revenues-increased-14-in-the-first-quarter-of-2019/
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